MCQ cost accounting

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Which of the following cost is linked with the calculation of cost of inventories?
► Product cost
► Period cost
► Both product and period cost
► Historical cost
Page no 12 

Question No: 2 ( Marks: 1 ) - Please choose one
You made Rs. 10,000 loan to your cousin's company. At the end of one year, the company returned to you Rs. 10,850. The Rs. 850 is called which one of the following? 
► Increases in loan
► Increases in dividends
► An 8.5% return on investment 
► All of the given options

Question No: 3 ( Marks: 1 ) - Please choose one
Machine lubricant used on processing equipment in a manufacturing plant would be classified as a:

► Period cost (manufacturing overhead)
► Period cost (Selling, General & Admin)
► Product cost (manufacturing overhead)
► Product cost (Selling, General & Admin) 

Question No: 4 ( Marks: 1 ) - Please choose one
An average cost is also known as: 
► Variable cost
► Unit cost
► Total cost
► Fixed cost

Question No: 5 ( Marks: 1 ) - Please choose one
Finished goods inventory costs represent the costs of goods that are:
► Currently being worked on
► Waiting to be worked on 
► Waiting to be sold
► Already delivered to customers

Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following is deducted from purchases in order to get the value of Net purchases?
► Purchases returns
► Carriage inward
► Custom duty
► All of the given options

Question No: 7 ( Marks: 1 ) - Please choose one
Which of the following is correct?
► Units sold= Opening finished goods units + Units produced – Closing finished goods units 
► Units Sold = Units produced + Closing finished goods units - Opening finished goods units
► Units sold = Sales + Average units of finished goodsinventory
► Units sold = Sales - Average units of finished goods inventory

Question No: 8 ( Marks: 1 ) - Please choose one
In cost Accounting, normal loss is/are charged to:
► Factory overhead control account
► Work in process account
► Income Statement 
► All of the given options

Question No: 9 ( Marks: 1 ) - Please choose one
Material requisition is a document that supports the requirement of the material. This document is sent to store incharge and approved by:
► Store manager
► Production manager
► Supplier manager
► Purchase manager

Question No: 10 ( Marks: 1 ) - Please choose one
Over applied FOH will always result when a predetermined FOH rate is applied and:
► Production is greater than defined capacity
► Actual overhead costs are less than budgeted
► Budgeted capacity is less than normal capacity
► Actual overhead incurred is less than applied Overhead

Question No: 11 ( Marks: 1 ) - Please choose one
Which of the following would be considered as factory overhead using a job order cost system? 
► Direct materials 
► Direct labor
► Depreciation on factory buildings
► Salesperson's salary

Question No: 12 ( Marks: 1 ) - Please choose one
At the end of the accounting period, a production department manager submits a production report that shows all of the following EXCEPT:
► Number of units in the beginning work in process 
► Number of units sold 
► Number of units in the ending work in process and their estimated stage of completion 
► Number of units completed 

Question No: 13 ( Marks: 1 ) - Please choose one
In order to compute equivalent units of production, which of the following must be reasonably estimated? 
► Units 
► The percentage of completion 
► Direct material cost 
► Units started and completed 

Question No: 14 ( Marks: 1 ) - Please choose one
When 10,000 ending units of work-in-process are 30% completed as to conversion, it means:
► 30% of the units are completed
► 70% of the units are completed
► Each unit has been completed to 70% of its final stage
► Each of the units is 30% completed

Question No: 15 ( Marks: 1 ) - Please choose one
LG has incurred cost of Rs. 60,000 for material. Further it incurred Rs. 35,000 for labor and Rs. 70,000 for factory overhead. There was no beginning and ending work in process. 7,500 units were completed and transferred out. What would be the unit cost for material? 
► Rs. 22 
► Rs. 16
► Rs. 14
► Rs. 8

Question No: 16 ( Marks: 1 ) - Please choose one
A chemical process has normal wastage of 10% of input. In a period, 2,500 Kg of material were input and there was abnormal loss of 75 Kg. What quantity of good production was achieved?


► 2,175 kg
► 2,250 kg
► 2,425 kg
► 2,500 kg

Question No: 17 ( Marks: 1 ) - Please choose one
If the cost per equivalent unit is Rs. 1.60. The equivalent units of output are 50,000. The WIP closing stock is 10,000 units, 40% completed. What will be the value of closing stock? 
► Rs. 9,600 
► Rs. 80,000 
► Rs. 16,000 
► Rs. 6,400 
0046 = 06.1 * 0004 = 04. * 00001
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the given cost does not become the part of cost unit?
► Advertising expenses 
► Direct labor cost 
► Factory overhead cost 
► Cost of raw material 

Question No: 19 ( Marks: 1 ) - Please choose one
Which of the given cost becomes the part of cost unit?
► Direct material cost 
► Factory overhead 
► Direct labor cost 
► All of the given options

Question No: 20 ( Marks: 1 ) - Please choose one
The main difference between the profit center and investment center is:
► Decision making
► Revenue generation
► Cost incurrence 
► Investment 

Question No: 21 ( Marks: 1 ) - Please choose one
The Economic Order Quantity is the amount of inventory to be ordered at one time for purpose to minimize: 




► Conversion cost 
► FOH cost
► Inventory cost
► Prime cost 

Question No: 22 ( Marks: 1 ) - Please choose one
The annual demand for a stock item is 2,500 units. The cost of placing an order is Rs. 80 and the cost holding an item in stock is for one year is Rs. 15. 
Required: What is the EOQ? 
► 163 units
► 1250 units 
► 5,000 units
► 160 units 

Question No: 23 ( Marks: 1 ) - Please choose one
TO whom purchase order form is issued to place an order?
► Work station incharge 
► Store incharge 
► Supplier 
► Manager 

Question No: 24 ( Marks: 1 ) - Please choose one
What type of information CANNOT get from bin card? 
► It provides the information for Reorder level
► It provides the information for Economic order quantity 
► It provides the information for Maximum daily consumption
► It provides the information for Cost of material consumed

Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following groups of workers would be classified as indirect labor? 


► Machinists in an organization manufacturing clothes 
► Bricklayers in a house building company 
► Maintenance workers in a shoe factory 
► None of the given options 

Question No: 26 ( Marks: 1 ) - Please choose one
Taylor's Differential Piece Rate Plan based on _____________piece rates is fixed.




► Two
► Three
► Four
► Five

Question No: 27 ( Marks: 1 ) - Please choose one
Meerick Differential Piece Rate Plan based on _____________piece rates is fixed.
► Two
► Three
► Four
► Five

Question No: 28 ( Marks: 1 ) - Please choose one
Depreciation of building expense is an example of factory overhead which is apportioned on the basis of: 




► Capital value
► Departmental payroll
► Area in square feet or cubic feet 
► Number of workers 

Question No: 29 ( Marks: 1 ) - Please choose one
Maintenance and repair of plant and machinery can be apportioned on the basis of: 




► Capital value 
► Departmental payroll
► Area in square feet or cubic feet 
► Number of workers

Question No: 30 ( Marks: 1 ) - Please choose one
Calculate predetermined factory overhead absorption rates with the help of given data. 

Items Budgeted figure Actual Figures
Factory overhead (Rs) 1,200,000 ----
Machine hours 200,000 28,000

► Rs. 43.00
► Rs. 0.20 
► Rs. 6.00
► Rs. 14

Question No: 31 ( Marks: 1 ) - Please choose one
In which of the situation spending variance will give favorable result?




► Actual factory overhead is less than absorbed factory overhead
► Actual factory overhead is greater than absorbed factory overhead
► Budgeted factory overhead for actual volume is greater than actual factory overhead 
► Absorbed factory overhead less than budgeted factory overhead for actual volume 

Question No: 32 ( Marks: 1 ) - Please choose one
If absorbed factory overhead is Rs.155,000 and Budgeted factory overhead for actual volume is Rs. 110,000 then difference of both will be:

► Unfavorable Spending variance of Rs. 45,000
► Favorable Spending variance of Rs. 45,000
► Favorable Volume variance of Rs. 45,000
► Favorable Budget variance of Rs. 45,000

Question No: 33 ( Marks: 1 ) - Please choose one
Which of the given is CORRECT for accounting entry of closing balance of Work In Process (WIP)?




► WIP a/c Dr and Inventory a/c Cr
► Inventory a/c Dr and WIP a/c Cr
► WIP a/c Dr and payroll a/c Cr
► There is no accounting entry for closing balance of WIP

Question No: 34 ( Marks: 1 ) - Please choose one
Greenwood petroleum has the data for the year was as follow:

Lost units (Normal Loss) 200 
Introduced units during the year 67,00
Units in process 15,00 

Identify how many units were completed and transferred out during this period?
► 1,700 units
► 5,000 units
► 1,500 units
► 6,900 units

Question No: 35 ( Marks: 3 ) 
Schlamber Company Factory overhead rate is Rs.2 per hour. Budgeted overhead for 3,000 hours per month is Rs. 8,000 and 7,000 hours is Rs. 12,000. Actual factory overhead for the month was Rs.9, 000 and actual volume was 5,000 hours.

Required:
1. Applied overhead
2. Applied FOH = capacity attained x OAR
3. = 5000 x 2 
4. = 10000
5. Over-or under applied overhead.
6. Applied FOH – Actual FOH
7. = 10000 + 9000
8. = 1000 
9. As the answer is positive so its Favorable balance showing over applied FOH of Rs.100 
Question No: 36 ( Marks: 5 ) 
Irfan Industries Limited has two production departments A and B and two mutually interdependent service departments X and Y. Cost of service departments is apportioned on the basis of following %ages:

A B X Y
Service department X 50% 30% - 20%
Service department Y 40% 50% 10% -

Following figures of departmental costs are available after the primary distribution:

Department A 15,750 Department B 7,500
Department X 11,750 Department Y 5,000

Calculate total factory overhead of production department by preparing a work sheet showing the secondary distribution using Repeated apportionment method. 



Question No: 37 ( Marks: 5 ) 
PA limited operates a job costing system. The company standard sale price is predetermined Rs. 505 based on cost plus 20% profit margin. The estimated cost for Job # 141 is as follows:

Direct material 5 meters@ Rs.20 per meter
Direct labor 14 hours@ Rs. 8.00 per hour

Production overhead for the year are budgeted to be Rs.200,000 and are to be recovered on the basis of the total 40,000 direct labor hour for the year.
Required: 
v Calculate Cost of Goods Sold for job # 141
v Calculate amount of profit for job #141